Lucid estimates to incur up to $30 million as restructuring expenses.
American luxury electric vehicle manufacturer Lucid Group announced on Tuesday to eliminate 18% of its workforce or approximately 1,300 employees. Joining the long list of companies that are laying off several employees, Lucid plans to complete the restructuring process by the end of the second quarter of 2023.
“Given evolving business needs and productivity improvements, we are reducing the size of our organization by approximately 18%, which will affect Lucid employees and contractors,” the company’s chief executive officer Peter Rawlinson said in an email to staff. “We have been reviewing and implementing several other ways to optimize our cost structure, but unfortunately these measures alone won’t achieve our objectives. Consequently, we’ve made the painful but necessary decision to let some of our talented team members go.”
The CEO added that the action is aligned with the cost discipline announcement made in late February when Lucid reported earnings. Additionally, the workforce reduction in the United States will happen in nearly every organization and level, including executives, Rawlinson said. The affected employees will be communicated about the move in the next three days.
Furthermore, the affected employees will get a severance package that includes access to career resources, Lucid-paid healthcare coverage continuation, and acceleration of equity. Lucid estimates to incur approximately $24 million to $30 million in charges in connection with the restructuring plan.
“These decisions are designed to position us to be more resilient and agile, thereby strengthening the company for the long-term,” Rawlinson said. “Our mission remains unchanged. We are committed to a more innovative and environmentally sustainable future – designing, building, and delivering the best EVs on the market as we expand globally and develop more exceptional vehicles such as the Gravity SUV, which we plan to launch in 2024.”
In the past, several companies including Mark Zuckerberg-led Meta, Sundar Pichai-led Alphabet, Elon Musk-led Twitter, and Satya Nadella-led Microsoft, among others, have laid off thousands of employees in an attempt to gear up for a global economic slowdown.
Just at the start of this week, American multinational media company Walt Disney commenced its first round of job cuts. The company previously announced laying off 7,000 employees in order to streamline its business. Similarly, Microsoft-owned popular internet hosting platform GitHub also laid off its entire engineering team in India, impacting over a hundred employees.